Creating market support for energy efficiency

This policy brief describes India's Perform, Achieve and Trade (PAT) scheme, a market-based energy efficiency mechanism targeting energy-intensive industries. Launched in March 2012 under the National Mission on Enhanced Energy Efficiency, the scheme uses plant-specific energy consumption reduction targets and tradable energy savings credits to reduce emissions and enhance industrial competitiveness.

• The Perform, Achieve and Trade (PAT) scheme is a market-based mechanism designed to scale up energy efficiency in India's energy-intensive industries. It is the flagship program of the National Mission on Enhanced Energy Efficiency, which is one of eight missions under the National Action Plan on Climate Change, 2008. The scheme aims to reduce emissions by 26 million tonnes of carbon dioxide equivalent (Co2e) by 2015, supporting a national goal of reducing carbon intensity by 20–25% from 2005 levels by 2020.
• The PAT scheme targets 478 facilities across eight specific sectors: aluminium, chlor-alkali, textile, pulp and paper, iron and steel, fertiliser, cement, and thermal power plants. These facilities account for approximately 60% of India's total primary energy consumption. Rather than using a single sectoral target, the scheme sets plant-specific targets to account for variations in plant age, raw material quality, and processes, with an average reduction target of 4.8%.
• The scheme operates by assigning each facility a specific energy consumption (SEC) reduction target based on a baseline SEC (the average energy consumed per unit of production from April 2008 to March 2011). Facilities that exceed their efficiency gains receive tradable certified energy savings credits, while those that fail to meet targets must purchase credits to comply. The market determines the price of these credits, as the Bureau of Energy Efficiency (BEE) has not set a minimum price.
• The design of the PAT scheme involved a four-year preparation phase characterized by extensive stakeholder engagement to secure industry buy-in. This included approximately 100 workshops and meetings with Designated Consumers (DCs), state government officials, and energy auditors. This process led to the adoption of plant-specific targets over sectoral ones. However, awareness remains uneven; while the cement sector shows high confidence, sectors such as textiles and fertilisers report very low or low levels of awareness.
• Implementation of the scheme relied on existing institutional capacity in India, including the Energy Conservation Act of 2001 and the Bureau of Energy Efficiency (BEE). By 2010, India had over 7,700 certified energy managers. Despite this, the document notes that state-level capacity requires further strengthening to effectively handle regulatory, enforcement, and monitoring functions, as well as the new requirements for trading energy efficiency credits.

APA

Singh, N. (2013). Creating market support for energy efficiency. Climate and Development Knowledge Network. http://cdkn.org/wp-content/uploads/2013/01/India-PAT_InsideStory.pdf

Chicago

Singh, Neelam. Creating market support for energy efficiency. Climate and Development Knowledge Network, 2013. http://cdkn.org/wp-content/uploads/2013/01/India-PAT_InsideStory.pdf.

Wikipedia

{{cite report |last1=Singh |first1=Neelam |title=Creating market support for energy efficiency |publisher=Climate and Development Knowledge Network |date=January 2013 |url=http://cdkn.org/wp-content/uploads/2013/01/India-PAT_InsideStory.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{singh2013creating, author = {Singh, Neelam}, title = {{Creating market support for energy efficiency}}, institution = {Climate and Development Knowledge Network}, year = {2013}, month = jan, url = {http://cdkn.org/wp-content/uploads/2013/01/India-PAT_InsideStory.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }